Deep Dive
What is the Norwegian Oil Fund and how did it originate?
The Norwegian Oil Fund was established in 1996 using money earned from oil drilling off the Norwegian coast. It was created to avoid the 'Dutch disease' seen in other countries, where excessive domestic spending led to economic issues.
What is the current size of the Norwegian Oil Fund?
The fund has grown from an initial investment of 2 billion Norwegian kroner in 1996 to 19,000 billion kroner, making it the largest sovereign wealth fund in the world.
What is the spending rule for the Norwegian Oil Fund?
The fund has a spending rule that limits annual withdrawals to 3% of its total value, ensuring long-term sustainability.
How does the Norwegian Oil Fund's structure differ from a hedge fund?
Unlike a hedge fund, the Norwegian Oil Fund operates under a strict mandate from the Ministry of Finance and is run by a team of 700 people, rather than being solely performance-driven.
Why does Nicolai Tangen believe returns will be low in the future?
Tangen believes low returns are likely due to the end of low-interest-rate periods, a more dangerous global environment, and market concentration in a few large companies with AI connections.
What concerns Nicolai Tangen about market concentration in the US?
Tangen is concerned about the concentration of the US market in a few large companies, particularly those tied to microchips, which are crucial for global supply chains and vulnerable to geopolitical risks.
Why does Nicolai Tangen think Europe is lagging in tech innovation?
Tangen believes Europe is behind in tech innovation due to a lack of large tech companies, excessive regulation, and a different industrial policy mindset compared to the US.
What does Nicolai Tangen think about Mario Draghi's report on European economic potential?
Tangen considers Draghi's report well-thought-out and important, but he is skeptical about Europe's ability to implement the necessary changes to boost innovation and economic growth.
What does Nicolai Tangen see as the biggest risk to global markets?
Tangen identifies the potential loss of appetite for global state debt, currently at $100 trillion, as the biggest risk, as it could lead to sudden, violent market moves similar to those seen in the UK.
How does Nicolai Tangen view the UK as a place to do business?
Tangen believes the UK is a good place to do business, with many strong global companies, but acknowledges that its allocation in the fund is relatively small due to its size compared to the MSCI world index.
What is Nicolai Tangen's stance on private equity in the Norwegian Oil Fund?
Tangen suggests that the fund may consider investing in private equity if allowed, as current challenges in the private equity market could present opportunities in the next five to ten years.
What does Nicolai Tangen value in potential asset managers for the Norwegian Oil Fund?
Tangen values asset managers who perform well, have a strong strategy, a robust process, and are highly ethical and focused on ESG considerations.
How does Nicolai Tangen view the impact of the US election on asset prices?
Tangen believes the US election's impact on asset prices is likely to be minimal, as the market appears agnostic to the election outcome and focuses more on company performance.
What does Nicolai Tangen love and hate in his personal life?
Tangen loves learning and values continuous education, while he dislikes bureaucracy and red tape, which he sees as a hindrance to business in Europe.
- The Norwegian Oil Fund, managed by Nicolai Tangen, holds approximately $2 trillion in assets.
- It owns about 1.5% of every listed company globally.
- The fund's spending is limited to 3% annually, and its management is guided by a strict mandate from the Ministry of Finance.
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